Airbnb stock (NASDAQ NDAQ: ABNB BNB ) has outperformed the broader tech sector this year, down only about 9% year-to-date, while the Nasdaq 100 is still down about 18% over the same period. As global Covid-19 cases decline, tourism has surged, and Airbnb is a key beneficiary, as consumers’ preference for housing stocks grows and the company’s strength in cities and urban areas is likely to be stronger bounce back.
In the first quarter of 2022, Airbnb’s revenue rose 70% year over year to $1.51 billion, with total nights and experiences booked surpassing pre-pandemic levels of more than 102 million. Airbnb’s average daily booking fee also rose 5% this quarter from a year ago to $168, although the growth rate has slowed from 20% in the fourth quarter of 2021. Net loss also narrowed sharply to about $19 million, driven by better cost management and higher revenue, while adjusted EBITDA was $229 million, compared to a loss of $248 million in the year-ago quarter. The second quarter is also expected to remain strong, with the company guiding revenue between $2.03 billion and $2.13 billion, up at least 52% from last year, as summer bookings trend above 2019 levels.
So, is Airbnb stock still a buy at its current level of around $156 per share? We think the stock still has more upside. While the stock trades at 13 times 2022 consensus revenue, the company’s solid growth rate is a testament to that. Additionally, Airbnb’s asset-light, high operating leverage business model should make it very profitable in the long run as revenue continues to grow. Given the low labor intensity of its operations, the company is also likely to be less affected by the spike in inflation than other gig economy players. Airbnb is also likely to report its first full-year profit in 2022, which could also be a catalyst for the stock in a market where investors are increasingly focused on earnings and cash flow. We value Airbnb stock at about $180 per share, or about 14.5 times the company’s projected 2022 revenue. Our price estimates are approximately 15% higher than current market prices. See our interactive analysis of Airbnb’s valuation: Expensive or cheap? more details. See our dashboard on Airbnb revenue to learn about Airbnb’s business model and likely trends in revenue.
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